This editorial in the Investors Business Daily reports the results of a study of Obama's proposals that finds they would redistribute $131 billion from the wealthiest 1% of Americans to the rest. The thing about such studies which the editorial doesn't report is that they always, explicitly or implicitly, say ceteris paribus, or its English equivalent: all other things being equal.
Aye, there's the rub as Shakespeare said...all other things are never equal. Raise taxes on the wealthy and they move their economic activities off-shore, engage in counter-productive tax sheltering, or simply bribe legislators to insert subtle loopholes through which they can pass income. They will arrange to make less money, or appear to do so, rather than give it to the tax man. Do you suppose it is a coincidence that millions of retired Americans have moved to states with no income tax?
Economist Arthur Laffer was right, of course. Governments take in more tax revenue when they lower tax rates because taxpayers feel less penalized for earning income and are willing to report earning more of it. Of course, the reverse is also true, governments take in less tax revenue when they raise tax rates.
Liberals feel better when tax rates on the wealthy are high, to them it feels more fair somehow. Unfortunately, it doesn't produce the revenue they need to fund those nanny state programs they crave. You have to love the irony of the liberals' situation, what feels right doesn't work, while what works doesn't feel fair.
One could almost feel sorry for them...almost, but not quite.
